Mcdonald Supply Chain

10921 Words Sep 21st, 2012 44 Pages
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REV: APRIL 16, 2007

RAY A. GOLDBERG
JESSICA DROSTE YAGAN

McDonald’s Corporation: Managing a Sustainable
Supply Chain
In January 2007, Frank Muschetto, McDonald’s Senior Vice President of Worldwide Supply Chain, returned to his office from a meeting with Bob Langert, Vice President of Corporate Social
Responsibility (CSR). Muschetto had approved the formation of an internal Sustainable Supply Chain
Working Group (SSCWG) in the summer of 2006 to “develop the strategies and tools necessary to accomplish McDonald’s vision of sustainable sourcing.” Langert, a co-leader of the SSCWG, had just discussed the group’s preliminary findings with Muschetto.
As described in its latest Worldwide Corporate Responsibility Report
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Kroc and his staff made other supply chain innovations. Unlike other food retailers at the time,
McDonald’s established strict standards for the ingredients and appearance of each product;
McDonald’s staff often visited suppliers without warning to ensure their compliance. Kroc terminated those suppliers that could not consistently provide high quality and dedicated service but he rewarded those that did with loyalty and volume. In effect, he made his suppliers partners in his quest for fast-food greatness.

Success
Together with over 5,900 independent owner/operators (who own and operate more than 73% of all McDonald’s restaurants), McDonald’s serves more than 50 million people daily in over 30,700 restaurants in 118 countries. Total restaurant sales in 2005 of $54.3 billion made it the largest foodservice retailer in the world (see Exhibit 1 for historical financial information).
McDonald’s supply chain has been an integral part of its success. Honorary Chairman and former
CEO Fred Turner characterized McDonald’s operations as a three-legged stool, with the employees, owner/operators, and suppliers as the three legs: “as with a stool, all three are essential, and all three have to be strong and balanced to succeed.”3 John Helledy, Vice President of

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